On October 18, the U.S. Securities and Exchange Commission (SEC) approved a rule change that would allow the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange (CBOE) to offer options trading on several spot Bitcoin exchange-traded funds (ETFs).
The decision came during a period of strong weekly inflows for Bitcoin ETFs, marking their best performance in about seven months.
SEC Approves Bitcoin Options Trading
SEC filings revealed that both exchanges have been authorized to list options for spot ETF products. However, while the NYSE has full approval for all products, the CBOE listing excludes the Grayscale Bitcoin Mini Trust.
The Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,76 which requires an exchange to have rules designed to prevent fraudulent and manipulative acts and practices, to remove impediments to and improve the functioning of a free and open market, and to protect investors and the public interest, as the SEC stated in the filings.
The exact launch date for these options has not been confirmed. However, ETF experts expect the approval to expand access to crypto-related financial products on major U.S. exchanges. This move is likely to increase liquidity around Bitcoin ETFs, attract more participants to the market, and ultimately boost the industry.
Jeff Park, Head of Alpha Strategies at Bitwise, pointed out the advantages of ETF options over existing Bitcoin options on platforms like Deribit. He noted that ETF options offer cross-market trading, allowing for integration with multiple assets like GLD.
Park emphasized that derivatives do not directly affect Bitcoin supply but allow dollar holders to hedge their exposure to Bitcoin, potentially reducing volatility. He also highlighted that ETF options could allow market conditions to have a significant impact on large assets like BTC.
ETF options are the tightropes that accelerate the flows that convert Bitcoin’s potential energy into kinetic energy, all leading in one direction: up, Park concluded.
The SEC approval comes as ETFs experience an exceptional week of inflows. Data from SoSoValue reveals that Bitcoin ETFs have amassed over $2 billion, extending their winning streak to six consecutive days. As a result, the ETFs have now reached $21 billion in total net inflows, driven by strong investor demand.
Nate Geraci, head of ETF Shop, believes this continued momentum reflects strong interest from retail and institutional investors in Bitcoin ETFs. At this rate, he expects BTC ETFs to surpass gold ETFs in market size within the next two years.
